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IAC takes Diller tiff to court

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IAC/InterActiveCorp. has asked a court to dismiss legal action by big shareholder Liberty Media, saying its attempt to remove chairman and CEO Barry Diller and other directors could "cripple" the company and threaten its quarterly earnings report.

In a Delaware Chancery Court filing Thursday, IAC accused Liberty of trying to create "management and market chaos" to disrupt its operations.

The IAC move is the latest in an increasingly bitter showdown between the company and longtime investor Liberty, controlled by chairman John Malone. He and Liberty CEO Greg Maffei have been unhappy with IAC's stock price and in recent months have talked with Diller about possibly restructuring the company or Liberty's stake in it.

Among other things, the two sides had looked at swapping part of Liberty's stake for home shopping network HSN or other IAC assets.

But this week, Liberty asked a court to remove Diller and six other board members and strip Diller of long-held rights to vote the company's controlling shares, escalating the showdown.

Liberty cited concerns that a planned split of IAC into five companies and a proposed new share structure for the core business would dilute its say in company affairs.